Emanuel Gathers 30 Illinois Mayors To Discuss Pension Reform

Chicago Mayor Rahm Emanuel and the mayors of 30 other cities in Illinois gathered on May 10, 2012, to discuss the need to reform public pension systems for police officers and firefighters. (Credit: CBS)

Updated 05/10/12 – 4:32 p.m.

CHICAGO (CBS) — Mayor Rahm Emanuel rounded up mayors from 30 other cities in Illinois on Thursday to build support for pension changes they say are needed to keep Illinois municipalities out of bankruptcy.

WBBM Newsradio’s John Cody reports Emanuel is trying to change the way police and firefighter pensions are handled statewide.

The mayor said long-delayed decisions on reforming the pension system have increased municipal pension obligations to the point they’re cutting into the ability to provide basic services.

“Costs associated with maintaining the retirement system has come to a point that you cannot do the basic things that you need to do as a city, in providing for your residents – whether that’s garbage collection, recycling, areas of public safety – and maintain those obligations,” Emanuel said.

With the clock ticking toward the end of the Illinois General Assembly’s spring session in Springfield, and no pension reform bill in sight, Emanuel and his fellow mayors were seeking to turn up the heat on lawmakers.

CBS 2 Chief Correspondent Jay Levine said the mayors teamed up, since they share similar problems with pension costs. At least one of the mayors also issued a threat to lawmakers.

Burr Ridge Mayor Gary Grasso said, if it comes to deciding between paying into failing pension funds, or paying for city services, he’s already made that choice.

“I’m willing to not pay into the pension system, and meet the services and the requirements of the residents of Burr Ridge,” Grasso said.

He and several other suburban and downstate mayors stood shoulder-to-shoulder behind Emanuel, demanding pension reform from Springfield.

“Acting as if this is not difficult, but that if you just do what we’re doing now, and that this is gonna resolve itself, that is the most dishonest thing, the most irresponsible thing to do,” Emanuel said.

The Mayor went to Springfield himself on Tuesday to plead the case for major changes to public pension systems. The other mayors, who believe pension problems could bankrupt their communities, had other ieas for future trips.

Palos Hills Mayor Jerry Bennett said, “Mayor after mayor – if they had a big box out in front of the doors in Springfield – are ready to tell them ‘We are gonna drop the keys to city hall in that box, you guys have run the show for so long, maybe you’d like to run a city and village.’”

Danville Mayor Scott Eisenhauer said, last year, his city put nearly $4 million into the police and fire pension system, an amount equal to 83% of the entire fire division budget.

“And more than the amount of money than we spend annually on road repair and replacement,” he said.

“Not only have we been forced to reduce our personnel by 25 percent in the city of Danville, but some very valuable members of our public safety department retired, noting that not working was more lucrative than working,” Eisenhauer said.

Emanuel and the other mayors are proposing a four-point plan: increase contribution levels for police officers and firefighters, reduce or freeze cost-of-living increases, raise the retirement age, and merge 638 separate pension funds statewide into one to produce investment economies of scale.

Gov. Pat Quinn has been pushing pension reform 24/7 recently, and on Wednesday, house lawmakers led by Speaker Mike Madigan voted to eliminate free health care for retirees.

But the local mayors, including Grasso, said a lot more needs to be done right away.

“There’s still time to fix the system, but if you don’t fix the system, the day will come for all these mayors to make the difficult choice of saying, ‘I cannot put money into the pension, that I need for public safety, that I need for roads and bridges, and for public health,” Grasso said.

It’s the same reason the mayors said new revenue sources aren’t the answer, without also fixing structural problems — including automatic cost-of-living increases, unrealistically early retirement ages, and insufficient employee contributions.